The internet economy is predicted to double in value by the year 2016 according to one of the world’s leading management consulting firms BCG (Boston Consulting Group). Based on the research that they carried out, they predict that the value of the internet will significantly increase from £1.5 trillion to £2.7 trillion in the coming years.
When you consider how much the internet has exploded in popularity, it seems remarkable that it is still growing. The study presents evidence that suggests that in approximately 4 years nearly 3 billion people will be using the internet, nearly 50% of the world population. The reason for this prediction of exponential growth is the huge rise of mobile internet access anticipated from smart phone users.
In recent years, 200million people annually discovered the internet for the first time. With the massively decreased price of smart phones it seems apparent that the era of the desktop PC is coming to an end when it comes to internet access. The study predicts that by 2016 80% of all internet users will be getting access through their phones.
Numbers that end with the word trillion become unimaginable and difficult to contextualise. So it is important to think that this whilst figure for the internet economy is larger than that of Italy’s total, it is only a fraction of the global total. In 2010 the internet was said to be responsible for $2.3 trillion dollars being pumped into the economies of the leading nations of the world, the G20, but this figure is only 4.1% of their collective economies.
But this is the fastest growing modern industry, particularly if these predictions turn out to be correct. It is because of the revolutionary way that the internet has affected society that BCG have outlined how we are entering a different era of ‘new internet’:
• Web access is no longer a luxury (the UN actually already declared it a human right)
• There will be shift to a larger number of web users in emerging markets and developing economies like China
• A consumer-retailer dialogue will be established and improved through social media
Everything in our lives is becoming more reliant on an internet connection as our lives adapt to be more ‘digital’. There has been a huge technological revolution that is still going on as many of the things around us such as cars, TVs and sensors become internet enabled; even to the extent that we have coined a new moniker – ‘smart houses’.
However, the managing director of BCG, David Dean said “During the research we discovered quickly that there is no approved way of measuring the internet economy.” This is a challenge when trying to estimate the value of the internet economy because there are many broad effects of the online revolution that are much harder to take figures for. It is fairly straight forward to acquire data about the revenue generated by purely internet based companies, or what online retail options have done for the sales of existing products. But it is extremely difficult to accurately measure the impact of the internet because of broader factors such as increased brand awareness through social media, or the efficient benefit of managers that are able to direct workforces remotely with smart phones.
This absolutely necessary but immeasurable tool for the economy has undeniably become an essential part of personal and professional life. David Dean sums it up best when he implied that discussing a movement into a “web economy” is just as ludicrous as talking about an “electricity economy”.
